James Pethokoukis is a columnist and blogger at the American Enterprise Institute. (Previously, he was Washington columnist for Reuters Breakingviews, the opinion and commentary wing of Thomson Reuters.) In addition, he is an official CNBC contributor.
Pethokoukis has written for many publications, including The New York Times, The Weekly Standard, Commentary, National Review, The Washington Examiner, and The Daily.
Pethokoukis has appeared numerous times on MSNBC, Fox News Channel, Fo… [more]

It’s hard to be a big tech company these days without somebody rooting for your demise. But some cases are a bit more understandable than others. Like this one: “Bannon says killing Huawei more important than trade deal with China.” I mean, I get it. Former Trump White House adviser and nationalist Steve Bannon wants America to launch and win a Tech Cold War against China. Taking an ax to what might be its most important tech company, a key player in the global 5G rollout, might be a big step forward in such a plan.

But it’s not Americans wanting to shut down just Chinese tech companies. Sometimes it’s Americans going after American firms. “Maybe we’d be better off if Facebook disappeared,” writes Sen. Josh Hawley, a Missouri Republican, in an op-ed for USA Today. And his problem isn’t just with the social media giant run by Mark Zuckerberg. According to Hawley, Twitter and Instagram, though oddly not YouTube, are also “best understood as a parasite on productive investment, on meaningful relationships, on a healthy society,” He claims they’ve created an “addiction economy” based on extracting and selling data gleaned from uninformed users. The first sentence of the piece: “Social media consumers are getting wise to the joke that when the product is free, they’re the ones being sold.”

The Dow plunged 450 points on the opening bell May 6 in response to this presidential tweet: “The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No! The 10% will go up to 25% on Friday.” Economists eye this brinkmanship fearfully. Bank of America/Merrill Lynch’s global research team, among many others, has warned that a trade war could cause a global recession. Desmond Lachman of AEI notes that there are splash back effects of imposing harsh tariffs. They may succeed in weakening China, but “Any marked slowing in the Chinese economy is bound to have spillover effects on those economies with strong trade links to that country.”

Among those countries with “strong trade links” to China would be ours. Lachman is warning that Trump’s policies may be undermining the strong economy, and that this should worry him looking at 2020. But before we get there, spare a moment to savor the irony of what Trump’s policies have so far achieved on one of his favorite 2016 hobbyhorses — the trade deficit. In 2016, the goods and services trade deficit with China stood at $309 billion (which Trump frequently exaggerated to $500 billion). As of March, 2019, the trade deficit with China was $379 billion — a 23 percent increase.

James Pethokoukis is a columnist and blogger at the American Enterprise Institute. (Previously, he was Washington columnist for Reuters Breakingviews, the opinion and commentary wing of Thomson Reuters.) In addition, he is an official CNBC contributor.
Pethokoukis has written for many publications, including The New York Times, The Weekly Standard, Commentary, National Review, The Washington Examiner, and The Daily.
Pethokoukis has appeared numerous times on MSNBC, Fox News Channel, Fo… [more]

Let’s assume the Trump White House blacklisting of Huawei in effect marks the beginning of a full-fledged Tech Cold War between America and China, complete with a Digital Iron Curtain. The full metaphor. How then does the conflict end in an American victory? And what does that even look like? Have the tech cold warriors, both within the White House and externally, given serious thought to any of this?

We know how the more comprehensive Cold War 1.0 concluded, with the dissolution of the Soviet Empire in 1991. It was a collapse that some predicted was inevitable. But at the time many others thought the scenario so unlikely as to be unworthy of speculation. The whole idea of 1970s detente was based on the perceived durability of the USSR. And this view held nearly to the very end. For example: The 1984 film “2010: The Year We Make Contact” was a sequel to the 1968 Stanley Kubrick-directed film “2001: A Space Odyssey” and concerns a joint US-USSR deep space mission.

James Pethokoukis is a columnist and blogger at the American Enterprise Institute. (Previously, he was Washington columnist for Reuters Breakingviews, the opinion and commentary wing of Thomson Reuters.) In addition, he is an official CNBC contributor.
Pethokoukis has written for many publications, including The New York Times, The Weekly Standard, Commentary, National Review, The Washington Examiner, and The Daily.
Pethokoukis has appeared numerous times on MSNBC, Fox News Channel, Fo… [more]

Former Trump White House adviser Steve Bannon told CNBC viewers today that China has “a master plan to become an economic hegemon.” I mean, yeah. Sure. A quarter millennium ago, China was the world’s largest economy and it is no doubt eager to regain that position if possible. And not just in terms of nominal GDP, but also as an economy on the technological frontier. Thus its efforts to leap forward in advanced manufacturing and AI.

The former, GDP, is easier to measure than relative tech prowess. Well, not that easy. My AEI colleague Derek Scissors has argued that “claims that China’s economy is already the world’s largest may be exaggerated by up to 30%.” And a comparison of national wealth shows “the American lead expanding.” But clearly the Chinese economy is pretty big and getting bigger and is technologically sophisticated in a way that the Soviet Union never was.

Having made her way through undergrad and a Master’s degree with no debt, Shama Hyder, the CEO of Zen Media and the bestselling author of The Zen of Social Media and Momentum, is fed up with her generation’s entitled attitude. Shama shares with Carol Roth how being an immigrant has informed her gratitude for the opportunities America affords us, the secrets to becoming successful (hint: there are no shortcuts) and what needs to happen in raising the next generation, as well as her own formula for graduating with no debt.

James Pethokoukis is a columnist and blogger at the American Enterprise Institute. (Previously, he was Washington columnist for Reuters Breakingviews, the opinion and commentary wing of Thomson Reuters.) In addition, he is an official CNBC contributor.
Pethokoukis has written for many publications, including The New York Times, The Weekly Standard, Commentary, National Review, The Washington Examiner, and The Daily.
Pethokoukis has appeared numerous times on MSNBC, Fox News Channel, Fo… [more]

Paul Romer.Is Big Tech today as dangerous as Big Money a decade ago? Economist and Nobel laureate Paul Romer seems to think there are disturbing similarities. In a New York Times op-ed, Romer advocates taxing revenue from the sales of targeted digital ads to check the size and power of “dominate digital platforms,” specifically Facebook and Google. “Our digital platforms may not be too big to fail,” he writes. “But they are too big to trust.” Romer’s policy goal is to nudge these companies away from the original sin of advertising-driven business models, and Romer sees a Pigovian tax as a more efficient way to reduce their size and influence than antitrust or regulation. He doesn’t like targeted ads, nor the financial power they generate.

Romer’s approach toward Big Tech might sound familiar to anyone who followed the post-Financial Crisis debate about Wall Street and “too big to fail.” Among the policy options for taming the megabanks and de-risking their business models were regulation, antitrust, or higher capital requirements. That last one, advocates argued, was the most efficient and market-friendly way of making failure less likely, potentially serving as a de facto tax on bigness, or even spurring a self-initiated breakup.

James Pethokoukis is a columnist and blogger at the American Enterprise Institute. (Previously, he was Washington columnist for Reuters Breakingviews, the opinion and commentary wing of Thomson Reuters.) In addition, he is an official CNBC contributor.
Pethokoukis has written for many publications, including The New York Times, The Weekly Standard, Commentary, National Review, The Washington Examiner, and The Daily.
Pethokoukis has appeared numerous times on MSNBC, Fox News Channel, Fo… [more]

If you want to find bad news in the April jobs report, it’s there to find. I mean, something is always there. And this report is no different. The labor force shrank, and the participation rate declined. Hours worked declined. Manufacturing job growth was just meh. The increase in average hourly earnings rate was less than expected. And while the 3.6% unemployment rate is the lowest since 1969, the broader U-7 rate of 7.3% is only the lowest since 2001.

But, gang, that 3.6% jobless rate is the lowest in 50 years, since humans first stepped foot on the Moon. And as the expansion nears its tenth anniversary, the economy is still generating gobs of jobs — 263,000 last month and a monthly average of 205,000 through the first four months of this year.